Korean carmaker Hyundai, the second biggest player in the Indian car market, expanded its profit by 6 per cent in the 2017 calendar year (CY) to Rs 22 billion. The profit increase is identical to market leader, Maruti Suzuki, which saw a 5 per cent increase in profit for the year ended March 31, 2018. Hyundai's sales revenue also grew by 6 per cent in 2017.
Hyundai Motor India (HMI), a subsidiary of Hyundai, is not listed in India and its annual financial results are declared to the registrar of companies with a time lag.
Information available with the parent company shows HMI's net profit increased almost 6 per cent to 349,862 million Korean won in CY17 from 330,280 million won in CY16. In rupee terms, the 2017 profit translates to almost Rs 22 billion. The carmaker's sales revenue in India increased 6 per cent to 6,346,672 million won last calendar year.
The CY17 revenue translates to Rs 398 billion. HMI sold record 678,221 vehicles in the year ended December 31, 2017, growing 2.44 per cent over the previous calendar year.
Of this, domestic sales were 527,320 units with a growth of 5.4 per cent y-o-y. Exports, however, at the country's second biggest car exporting company, had declined 6.57 per cent to 150,901 vehicles.
American carmaker Ford recently replaced Hyundai as the biggest exporter of cars from India.
At a consolidated level, Hyundai globally posted a decline of over 20 per cent in profit during CY17 to 4,546 billion won (Korean currency) even as sales revenue grew by 3 per cent to 96,376 billion won.
Its Indian arm is one of the steady performers and has posted growth in volume, sales and profits year after year. In CY17, the Indian arm accounted for 7.7 per cent of global profit compared to 5.7 per cent in the previous year. Share in the global revenue stood at 6.6 per cent in CY17.
Hyundai India Managing Director and Chief Executive Officer Y K Koo said early this year the company aims to produce 713,000 vehicles in 2018, which will also expand the capacity utilisation to a new high of 99 per cent at its Chennai plant. "We will still have an option to take the total production to 763,000 vehicles in 2019 without any expansion," he said.
On exports, Koo had said many Asian markets were seeing a shift in trend towards import of completely knocked down cars instead of completely built units owing to tax structures. Accordingly, thousands of cars that currently go as completely built units will be going in the form of completely knocked down units, allowing Hyundai to have a leeway to expand production.
Therefore, the company is in no hurry to set up a new manufacturing unit in India.